KARACHI, Dec 27: It happened by as thin a margin as 0.07 points, but the KSE-100 index shot through the roof to settle at an all-time high of 2661.38 points at the end of trading on Friday. That went to break the previous record high of 2661.31 points, set eight years ago on March 22, 1994.

Looking at the relentless charge of the bulls, for several weeks now, it wasn’t a question of “if” but “when” the index would whiz past its previous highest.

Most market players were expecting it to happen in the first week of the new year. But such was the buying frenzy on Friday that floor traders’ solemn, sombre faces lit up with glee as the index went on to touch 2,683 points before some profit-taking took some sheen off. But the day’s close saw to it that the index stayed a shade above its record best.

The volume of shares traded on Friday stood at 632 million shares, setting a new record of highest ever turnover, improving upon Thursday’s best of 618 million shares.

“Market fundamentals, strong economic growth, revenue collection, exports, government’s commitment to privatization, corporate governance and robust corporate earnings and payouts, all have contributed to the current rally,” managing director KSE, Moin M. Fudda told Dawn.

He stated that all the risk management measures were in place and that the management had no worries about exposure risks. He, however, added that he was not quite comfortable with the high badla rates at 20 per cent or more.

Fudda hoped that with more liquidity injected by banks and institutions, badla rates would drop to lower levels.

Most market analysts admitted that it was a liquidity-driven rally, helped by cheaper valuations and high yield.

Giving out an average yield of 12 per cent, stocks offer the most attractive option compared with deposits with banks and investment in NSS.

“The single most important factor behind the current rally is the declining interest rates in Pakistan,” said Mohammad Sohail, head of research at InvestCap Securities.

He said that it had brought down the required rate of return for shareholders, thereby enhancing equity values. He held that there was low probability that the interest rates could rise again in the medium term, given the SBP’s determination to support the system.

Unlike the previous great bull market of 1994, which was precipitated by the foreign investors and followed by domestic investors and institutions, the current bull run was due to intensive buying by local institutions and retail investors which was why most analysts thought there was least fear of a big plunge.

Yet some continue to look at the stock prices with disbelief.

“Though institutions may find it difficult to resist even 8-9 per cent yields keeping in view the below 5 per cent rates for 12 months horizon, retailers should look for other avenues like National Savings Schemes, where the rates are still attractive even if we assume a possible rate cut of 150-200 basis points,” said Arshad Arif, analyst at brokerage house, KASB.

“There may be some more upside in stocks like Hubco, FFC and Unilever at current prices, but the rest of the market is looking expensive at current levels,” he said.

But analysts at Arif Habib Securities said that market was likely to march further up on the back of positive development on all major fronts.

Wajahat Ali, analyst at Taurus Securities said: “We believe the strong positive sentiment will continue to drive the market up, though there may be some initial profit-taking”.

The volume of shares traded on Friday stood at 632 million shares, which was an improvement over 618 million shares traded a day earlier.

Prominent gainers during the day were Wyeth (Pak) which rose by Rs48 to close at Rs688 and Nestle Milkpak that increased by Rs14.05 to Rs219.

Major losers included Unilever (Pak), which declined by Rs32 to Rs1155 and Shell (Pak) which fell by Rs3 to Rs344. PTCL topped the list of actives with its price up by Rs1.05 to Rs25.60 on a turnover of 229 million shares.

It was followed by Hub Power, which on a volume of 220 million shares ended up by Rs1.80 to Rs38.90. PSO ranked third in terms of volume with 36 million shares changing hands on Friday, up by 65 paisa to Rs198.05.

FORWARD COUNTER: Turnover on the forward counter stood at 99 million shares, against 101 million shares on Thursday.